New Delhi: Just when it seemed the simmering tension between the RBI and the finance ministry has been brushed under the carpet – at least for the time being — Economic Affairs Secretary Subhash Chandra Garg has filed a fresh salvo, ostensibly directed at RBI Deputy Governor Viral Acharya.
“Rupee trading at less than 73 to a dollar, Brent crude below $73 a barrel, markets up by over 4% during the week and bond yields below 7.8%. Wrath of the markets?” Garg tweeted, in the ongoing war of words. Garg’s jibe was clearly in response to a recent speech by Acharya in which he had said governments that do not respect central bank’s independence incur the wrath of financial markets.
With the war of words persisting, it is apparent that the row between the RBI governor and the Finance Minister has not blown over. Rather, the air will clear post-Diwali, just before the meeting of the RBI’s board, scheduled on November 19.
IMF BATS FOR RBI: Meanwhile, the IMF has said it was monitoring the reported rift between the RBI and the Union Government, and expressed its opposition to any move that compromises the independence of central banks anywhere in the world.”We’re monitoring the development on that issue and will continue to do so,” International Monetary Fund Director of Communications Gerry Rice told reporters on Thursday, when asked about the row.
“I have said this before that we support clear lines of responsibility and accountability… And, the international best practice is that there should be no government or industry interference that compromises the independence of the central bank and financial supervisor,” Rice said.
